How to Successfully Manage IT Projects (and Avoid Common Pitfalls)
It’s no small feat to manage IT projects . According to McKinsey, only 47% of IT projects are completed on time , while Harvard Business Review points out that one in six IT projects doesn’t just exceed its budget ; it does so by an average of 200%.
The financial risk escalates with the size of the project. Research by McKinsey and the University of Oxford shows that IT projects with budgets larger than $15 million tend to overshoot their budget by 45% and their timelines by 7%.?
Even more worrying is the fact that these large-scale projects often deliver 56% less value than predicted (McKinsey).?
In this article, we’ll discuss how to manage IT projects in your organisation and avoid common pitfalls.?
What’s Included:
What Are IT Projects?
IT projects are initiatives undertaken to meet specific technological objectives within a defined timeframe and budget. These projects range from the development of new software, upgrading systems or migrating to new systems , to the implementation of IT infrastructure .??
Types of IT Projects
Six Reasons Why IT Projects Fail
In a study by McKinsey and the University of Oxford , IT executives identified reasons for project cost overruns, attributing 45% of failures to specific causes: 13% were due to missing focus, 9% to content issues, 6% to skill gaps, 11% to execution problems, and 6% remained unexplained.?
This highlights the diverse challenges IT projects face, underlining the need for targeted strategies to address these critical areas and prevent cost overruns.
Let’s take a closer look:?
One: Poor Planning
A project planned with overly optimistic deadlines might rush stages such as testing or user training. This results in deploying systems that may be full of bugs or difficult to use, leading to operational disruptions and additional costs in troubleshooting and training post-deployment.?
For instance, a software rollout intended to streamline inventory management might end up creating stockouts or overstocks due to inadequate system testing and employee training.
Two: Lack of Clear Objectives
Without clearly defined objectives, your IT project can easily veer off course. For example, a project to develop an e-commerce platform might start with the goal of improving user experience but gradually expand to include new features like advanced analytics, loyalty programs, and mobile compatibility without corresponding adjustments in budget and timeline.?
This scope creep can lead to unfinished modules, poorly implemented features, and a platform that fails at its core functionality due to spreading company resources too thin.
Three: Ineffective Stakeholder Engagement
Inadequate engagement with stakeholders often leads to solutions that do not align with user needs or expectations. If end-users are not involved in the development of a new customer relationship management (CRM) system, for example, the final product might lack essential features or have an interface that is not user-friendly.?
Consequently, user adoption rates plummet, negating the intended productivity improvements and requiring costly revisions and retraining to make the system workable.
Four: Technical Hurdles
Technical difficulties, particularly when integrating new solutions with existing IT infrastructure, can cause significant disruptions in your organisation.?
If you want to integrate a new payroll system without fully understanding its compatibility with the existing human resources management system, you could face errors in processing payments, affecting employee satisfaction and trust, and potentially leading to legal issues with missed or incorrect payments.
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Five: Inadequate Risk Management?
When risks are not properly anticipated and mitigated, they can lead to catastrophic project failures. Suppose a critical data migration project is underestimated in terms of complexity and the necessary safeguards like backup systems are not put in place.?
A failure in the migration process could result in significant data loss, leading to operational downtime, lost revenue, and damage to your company’s reputation.
Six: Poor Project Management
Poorly managed projects often suffer from cost overruns, delayed timelines, and subpar project deliverables. For instance, a project manager failing to effectively coordinate the tasks and roles of a diverse project team might see critical tasks falling through the cracks.?
This mismanagement can lead to a situation where a new business analytics tool is launched, but key reports are inaccurate or unavailable. This undermines the tool’s purpose and forces the company to revert to old manual processes, which wastes resources and lowers morale.
How to Manage IT Projects
Picture a tightrope walker balancing high above a bustling cityscape - this is akin to managing IT projects. Each element of IT project management is interlinked and thus demands a holistic approach to overseeing projects from inception through completion. That’s how you ensure they meet predefined objectives and deliver substantial business value.
Define Clear Objectives
Establish clear objectives at the start and create SMART (Specific, Measurable, Achievable, Relevant, Time-bound) goals that align with your organisation’s strategic direction.?
The scope of the project must be precisely outlined in a scope statement agreed upon by all stakeholders, to prevent any misunderstandings and manage scope creep. It is also crucial to have a structured change management process. This process should outline:
Maintain Quality Control
A rigorous quality assurance (QA) framework should be put in place from the design phase through to implementation and beyond. This includes setting agreed-upon quality standards and benchmarks.?
The project should integrate continuous testing phases, using various methods such as unit testing, integration testing, and user acceptance testing (UAT), to ensure each component meets these standards before proceeding. Feedback mechanisms should also be established to capture insights from testing and stakeholder reviews, allowing for iterative improvements and alignment with quality expectations.
Plan
To manage IT projects effectively, you need a comprehensive plan that doesn’t cut corners. Create a detailed project charter that encompasses the scope, goals, timelines, budget, and the roles and responsibilities of all team members. This serves as both a roadmap for the project and a contract between the team and stakeholders.?
Your project should be broken down into manageable milestones, with regular monitoring to ensure adherence to timelines and quick adjustments when necessary.
Assemble the Right Team
The success of an IT project heavily relies on having the right team in place. This starts by identifying the required skills and experiences and selecting team members who best match these needs. You must ensure that all necessary resources, including team members, technologies, and materials, are available when required.
It’s worth implementing a training plan to familiarise your team with new tools and technologies, complemented by support structures to help with the transition.
Communicate?
Keep all team members and stakeholders informed and engaged. Communicate regularly with all stakeholders, including project sponsors, end-users, and team members, and understand their needs, expectations, and concerns. Stakeholder engagement helps secure buy-in and ensure that the project aligns with business goals.?
We always recommend holding regular meetings to review the project's progress against its milestones and deliverables. Based on these reviews, you can adjust timelines, resources, and strategies as needed.
Manage Risks?
Risk management should begin with a thorough assessment of potential risks through brainstorming sessions, analysis of historical data, and consultations with experts. Each risk should be evaluated in terms of impact and likelihood, and appropriate mitigation strategies should be developed to minimise its probability or impact.
Assigning risk owners to monitor and manage specific risks and having contingency plans in place ensures preparedness and minimises disruptions to the project.
At IPT , we understand the importance of IT projects in your business's growth trajectory. We can help you improve your IT setup , transition to the cloud, formulate a disaster recovery plan in case things go wrong, and equip you to embrace digital transformation .?